Type 2 diabetes, a condition that is largely due to obesity and physical inactivity, has adverse effects on cardiac and peripheral vascular structure and function. Cardiovascular disease is the leading cause of death among persons with diabetes. The cardiovascular consequences of diabetes include left ventricular diastolic dysfunction, endothelial vasodilator dysfunction, and increased vascular stiffness, each of which is an early marker of future cardiovascular disease. Obesity, and particularly abdominal fatness, contributes to the development of diabetes, and is a factor that increases cardiovascular disease risk. Caloric reduction and exercise are clinically important for weight loss, increasing fitness, and improving blood glucose control. However, to our knowledge, there are no randomized trials in overweight and obese persons with diabetes in which the effect of diet and exercise on general and abdominal fatness, fitness, cardiac and peripheral vascular structure and function, and cardiac disease risk factors has been examined together. The primary aim is to test the hypothesis that a weight loss diet and exercise will each reduce abdominal fatness in overweight persons with type 2 diabetes. We also hypothesize that diet plus exercise will produce greater reductions in abdominal fatness. To test our hypotheses, we will randomize 140 overweight and obese persons with type 2 diabetes into a diet, exercise, diet plus exercise, or a control group for 6 months. The second aim to test the hypothesis that reductions in fatness will mediate improvements in endothelial vasodilator function, left ventricular diastolic function, and vascular stiffness, and that by producing greater reductions in fatness, diet plus exercise will be more effective than diet or exercise alone for improving cardiovascular parameters. The third aim is examine mechanisms by which diet, exercise, and abdominal fatness affect cardiovascular outcomes. These mechanisms include systemic inflammation, insulin sensitivity, aerobic and strength fitness, glycemic control, leptin, adiponectin, and cardiovascular disease risk factors. We will enroll an equal number of men and women, and in secondary analyses, we will explore gender differences in response to treatment. This study will provide novel insights into the mechanisms by which diet and exercise reduce abdominal fatness and improve cardiovascular health in overweight and obese persons with type 2 diabetes.Type 2 diabetes, which is largely due to obesity, and particularly abdominal obesity, and physical inactivity, is an increasing at an epidemic rate in the United States, and markedly increases the risk of cardiovascular disease. Persons with diabetes have abnormalities in cardiovascular structure and function that appear even before an individual suffers from a cardiac event such as a heart attack or developing heart failure. This study will examine the extent to which diet and exercise, either each alone or in combination, reduces abdominal fatness and improves cardiovascular parameters that are early markers of cardiovascular disease in overweight and obese persons with type 2 diabetes.